Ethereum (ETH) Price: Smart Money Betting on Post-Pectra Rally as Options Volume Explodes

TLDR

Long-term ETH holders increased holdings by 22% from March to May, lowering their cost basis Ethereum is trading in a narrow range between $1,783-$1,831 with tightening Bollinger Bands Options volume surged 75% as traders position for volatility ahead of May 7 Pectra upgrade Price is forming a symmetrical triangle pattern with support at $1,785-$1,800 Derivative markets show bullish sentiment with long-to-short ratios above 2.0 on major exchanges

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Ethereum has been experiencing interesting price action and on-chain developments as it approaches its Pectra network upgrade scheduled for May 7. Despite months of downward pressure since its December 2024 peak of $4,107, on-chain data reveals a surprising trend: long-term holders are steadily increasing their positions.

Ethereum (ETH) Price

Data from CryptoQuant shows that addresses classified as long-term ETH holders boosted their holdings by 22.54% between March 10 and May 3. These wallets increased from 15.53 million ETH to 19.03 million ETH during a period when prices remained below many holders’ average entry points.

ETH Holders Refuse to Sell: Accumulating Addresses Lower Their Cost Basis

“On March 10 they held 15.5356M ETH, and by May 3 this rose to 19.0378M ETH, a 22.54% increase. Behavior reflects structural conviction & clear expectations of short-term appreciation.” – By @oro_crypto pic.twitter.com/yx12tC7N0O

— CryptoQuant.com (@cryptoquant_com) May 5, 2025

This accumulation occurred even as Ethereum traded below these wallets’ realized price. On March 10, ETH was trading at $1,866.70, while the average acquisition cost of these wallets was approximately $2,026. Rather than reducing exposure, these holders continued to accumulate, bringing down their average cost basis to $1,980 by May 3.

The behavior of these long-term holders, who typically maintain ETH for more than 155 days, suggests strong conviction in Ethereum’s future prospects. Their consistent buying pattern shows they are not influenced by short-term price fluctuations.

Market Indicators Point to Potential Breakout

Ethereum’s price has consolidated into a narrowing range, currently trading between $1,783 and $1,831. Technical indicators suggest a potential breakout may be approaching. The Bollinger Bands are tightening, often a precursor to a strong price move.

The cryptocurrency faces resistance at $1,941, with support from the 20-day moving average at $1,739. The Relative Strength Index (RSI) sits at 54.63, just under its trend line of 55.50, indicating neutral momentum—neither overbought nor oversold.

Trading volume has been increasing since mid-April, suggesting growing market interest ahead of the network upgrade. This rising volume combined with price compression points to an impending volatility spike.

On the 4-hour chart, ETH is testing a confluence of technical factors: the 200 EMA line and horizontal support at $1,785-$1,800. This area intersects with the lower boundary of a symmetrical triangle pattern that formed after Ethereum rebounded from mid-April lows around $1,570.

Source: TradingView

The price currently hovers near $1,807, facing resistance from the upper triangle boundary at $1,845-$1,850. This range has stopped several bullish attempts in recent weeks. A break above could open the path to $1,910 and potentially $1,950.

The EMA cluster (20/50/100/200) on the 4-hour chart is converging between $1,779 and $1,818, creating a dense support-resistance zone. Any decisive move through this area will likely determine ETH’s next directional move.

Derivatives Signal Bullish Sentiment

The derivatives market provides additional insights into trader sentiment. Total trading volume rose 26.51% to $46.3 billion, while open interest increased 1.13% to $21.9 billion. In the options market, volume jumped nearly 75% to $357.69 million, indicating traders are positioning for price volatility.

Long positions outnumber shorts on major exchanges. The long-to-short ratio on Binance stood at 2.24, and on OKX at 2.04. Among Binance’s top trader accounts, this ratio was even higher at 2.76, suggesting strong bullish sentiment.

Source: Coinglass

Recent liquidations totaled $40.67 million, with $8.10 million coming from short positions. While long liquidations were higher overall, the presence of short liquidations in multiple timeframes suggests some upward price pressure.

Chart analysts have identified an ascending triangle formation in Ethereum’s price action. According to analyst Thecryptomist, ETH is forming this bullish pattern, with price movement inside a smaller wedge potentially triggering a breakout soon. The analyst identified $1,950 as a key level to watch.

The upcoming Pectra upgrade on May 7 is drawing market attention. This upgrade will raise the validator staking limit from 32 ETH to 2,048 ETH and increase the number of data blobs per block, potentially improving network throughput and efficiency.

Investor interest is building ahead of the upgrade, with some analysts drawing parallels to Bitcoin’s earlier cycles. One analyst noted that “Buying $ETH now is like buying BTC at $4,000,” pointing to Ethereum’s growing use in real-world asset tokenization and rising institutional interest.

The increase in long-term accumulation, derivatives activity, and the approaching protocol changes all suggest Ethereum is entering a crucial period that may determine its price direction for the coming weeks.

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